01655cas a2200241 a 4500 AALejournalIMF000897 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451842333 1018-5941 BD-DhAAL BD-DhAAL Scott, Louis. Pricing Floating-Rate Debt and Related Interest Rate Options / Louis Scott. Washington, D.C. : International Monetary Fund, 1990. 1 online resource (22 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Most developing country debt is denominated in U.S. dollars and has a floating interest rate. The pricing of floating rate debt and related interest rate options are examined in this paper. Formulas for pricing ceilings and floors on floating rate debt are derived for several different models of interest rate variability. A framework for pricing risky debt and loan guarantees is presented, and the implications of the debtor country's default option are analyzed. The elimination of large principal repayments, by collateralizing the principal, serves to reduce the debtor country's incentive to use its default option. Mode of access: Internet IMF Working Papers; Working Paper ; No. 1990/007 Full text available on IMF http://elibrary.imf.org/view/journals/001/1990/007/001.1990.issue-007-en.xml IMF e-Library